2018 Blueprint: Open Collective Bargaining

Posted on by Patrick Tuohey

THE PROBLEM: Under current Sunshine Law in Missouri, government bodies may close meetings, records, and votes relating to contract negotiations until the contract is executed or rejected. This lack of transparency in negotiations between government unions and government officials can lead to contractual agreements that aren’t in the public’s best interest.

THE SOLUTION: Open collective bargaining.

Open collective bargaining would allow the public to attend meetings where government bodies are negotiating collective bargaining agreements with unions to ensure that tax dollars are being spent wisely. Openness in public affairs empowers citizens to hold their government representatives accountable. The public is directly affected by policies set during collective bargaining; citizens therefore have a right to be present during such meetings. An open collective bargaining rule would not prohibit the public agency from discussing and formulating its bargaining positions in executive session.

WHO ELSE DOES IT? Alaska, Colorado, Florida, Georgia, Idaho, Iowa, Kansas, Minnesota, Montana, Ohio, Oregon, Tennessee, and Texas all require contract negotiations to be open.

THE OPPORTUNITY: A transparent negotiating process will enable the public to hold government accountable in its dealings with public employee unions and help ensure that the agreements reached between the two parties are in the interest of everyone instead of just a select group of employees.

KEY POINTS

  • Open collective bargaining gives citizens the opportunity to attend union negotiations with government bodies and help ensure that tax dollars are spent responsibly.
  • Missouri’s Sunshine Law allows government bodies to close meetings to the public if they relate to a negotiated contract, even though there is no compelling reason why negotiations between a union and a public body should be held in secret.
  • Government unions can make campaign contributions and support candidates that they will potentially bargain with after election. This advantage makes it especially important that the public be aware of how the government and public employee unions interact.

SHOW-ME INSTITUTE RESOURCES

Policy Study: A Primer on Government Labor Relations in Missouri

Video: Government Unions: Restoring Accountability

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Prevailing Wage

Posted on by Patrick Ishmael

THE PROBLEM: Many government construction contracts dictate what potential contractors must pay workers to get the job. These restrictions are bad news for taxpayers and laborers alike. Taxpayers may not be able to afford to start projects whose labor costs are inflated, and of course, laborers can’t get paid for projects that are never undertaken.

The prevailing wage sets a floor for pay, but it can actually hurt the workers it’s intended to help by denying employment to people who can do the job at a more competitive price. To make matters worse, making projects more expensive also means that less taxpayer money will be available for other priorities.

THE SOLUTION: Let the market set wages.

Rather than dictate wages, the government should have policies that support a healthy jobs environment where higher wages for all sorts of construction projects—including public construction—develop on their own without the harmful effects of wage floors.

Policymakers must keep in mind that project delays can hurt their communities over time. It would be better to let the market set wage rates for these projects and to begin delivering those public services sooner rather than later.

WHO ELSE DOES IT? States with no prevailing wage law include Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Utah, Virginia, and West Virginia.

THE OPPORTUNITY: Moving away from market-distorting policies like the prevailing wage will help the state promote job growth and spend taxpayer money efficiently.

KEY POINTS

  • These reforms would promote job growth and make public works projects more affordable.
  • Taxpayers get the most bang for their tax buck when their money is spent efficiently and effectively.

SHOW-ME INSTITUTE RESOURCES

Blog Post: Special Interests Inhibiting Joplin’s Recovery?

Blog Post: Playing Favorites on the Board of Aldermen?

Blog Post: The Race Is On: Wisconsin Pushes to End Project Labor Agreements and Prevailing Wage

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Public Pension Reform

Posted on by Patrick Ishmael

THE PROBLEM: Defined benefit (DB) pension plans promise employees annual payments for life upon retirement, but if a public plan does not have enough money to make these payments, taxpayers are legally bound to fund the difference. Nationwide, state-run public pension funds are underfunded by nearly $1 trillion dollars.

THE SOLUTION: Defined contribution plans.

Defined contribution (DC) plans consist of employer/employee contributions into individual accounts—think 401(k)—which employees can manage as they see fit. Upon retirement, the funds are available to employees. DC plans fundamentally differ from DB plans in that they cannot incur unfunded liability (so taxpayers are not on the hook), they put investment decisions into the employee’s hands, and they are transferable from one job to another.

WHO ELSE DOES IT? Public DC plans exist across the nation; states such as Michigan and Alaska offer DC plans for new state employees, while others such as Florida offer both DC and DB plans.

THE OPPORTUNITY: Pension reform offers a chance to stop the bleeding. DB plans cannot (by definition) incur unfunded liabilities. DC plans also offer employees a retirement account that they can manage themselves and take with them if they change jobs in the future.

KEY POINTS

  • DC plans can protect Missouri from devastating budget shortfalls.
  • When a DB plan’s investment returns are below (sometimes unrealistic) assumptions, taxpayers can be forced to pay the cost.
  • DC plans put investment decisions in the employee’s hands and can be transferred from one job to another.
  • Shifting to DC plans reduces the political incentive to overpromise when impacts won’t be felt for years.

SHOW-ME INSTITUTE RESOURCES

Policy Study: Public Employee Pensions in Missouri: A Looming Crisis

Policy Study: Missouri Transition Costs and Public Pension Reform

Essay: The Funding Status of State and Local Government Pensions in Missouri

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Public Union Recertification

Posted on by Patrick Ishmael

THE PROBLEM: Once a government union comes to power, it can stay in power indefinitely. No further elections are scheduled and no term limits are imposed. This means workers can do little to ensure their union truly represents their interests and is held accountable.

THE SOLUTION: Regular public union recertification elections.

Regular public union elections would give workers the right to elect union representation to fixed terms. Regular elections would help keep union actions in line with worker interests and lead to competition among unions. It would also help prevent backlash from union leadership in response to decertification petitions.1

WHO ELSE DOES IT? Currently, Wisconsin and Iowa require regular public union elections.

THE OPPORTUNITY: The Commonwealth Foundation recently gave Missouri a letter grade of ‘D’ regarding its public labor laws. Show-Me Institute research indicates that regular union elections need not be prohibitively expensive and offer a way to ensure that unions serve workers—not the other way around.

KEY POINTS

  • Public workers in Missouri should have the right to choose who represents them.
  • Regular elections would make unions more accountable to those they represent, just as regular government elections pressure politicians to be accountable to voters.
  • Regular elections can be held at a reasonable cost to taxpayers.

SHOW-ME INSTITUTE RESOURCES

Policy Study: A Primer on Government Labor Relations in Missouri

Essay: The Low Cost of Labor Reform

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Right to Work

Posted on by Patrick Ishmael

THE PROBLEM: Until recently, many workers in Missouri could be forced to join unions. That was unfair not only to the employees affected by the law, but also to employers who had to operate under it.

THE SOLUTION: Right to work.

Right to work ends forced unionism and lets workers decide whether joining a union best serves their interests. This means that being a member of a union cannot be a requirement for employment, and gives employees the final decision about whether they want to give money to a union that may or may not have their best interests at heart.

In 2017, Missouri passed Right to Work, but in 2018, the state will hold a referendum on that law.

WHO ELSE DOES IT? Alabama, Arizona, Arkansas, Florida, Georgia, Guam, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, and Wyoming.

THE OPPORTUNITY: If the state’s Right to Work law is put into full effect, Missouri will join the majority of American states that already have right to work laws, finally placing Missouri employers and employees on a level playing field with other states.

KEY POINTS

  • Missouri will be better able compete with neighboring right-to-work states in attracting businesses.
  • Existing unions will be more responsive to the concerns of members, thanks to the credible threat of members leaving the organization.
  • Employees will have greater control over their representation in negotiations with their employer.
  • Employers will have greater flexibility in managing their businesses and making their operations more successful.
  • Private employers are the focus, but similar laws in the public sector, like paycheck protection, should be pursued by policymakers as well.

SHOW-ME INSTITUTE RESOURCES

Policy Study: A Primer on Government Labor Relations in Missouri

Op-Ed: Rise of the Roosevelt Law: Is Reform in Government Unions Coming to Missouri?

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Special Taxing Districts

Posted on by Patrick Tuohey

THE PROBLEM: Special taxing districts (SDs) are political subdivisions of the State of Missouri that fund specific services and improvements, such as neighborhood security, fire protection, and various kinds of infrastructure. In theory, SDs can help deliver services to taxpayers efficiently and effectively. But in practice, certain SDs—particularly transportation development districts (TDDs) and community improvement districts (CIDs)—may create more problems than they solve.

First, these districts allow narrow special interests to tax the public for their own private gain. For example, a luxurious hotel in Kansas City instituted a CID in order to charge a 1 percent sales tax that it will use to refurbish rooms and replace carpeting.

Second, the districts are often drawn tightly around businesses, such as shopping malls, so that no local residents have to vote for the tax increase. The ability to draw district boundaries gives business owners a great deal of power to charge local taxes without public oversight. Without that oversight, SD boards can extend the length of their tax increases well past the initial project need.

Lastly, the Missouri State Auditor has pointed out that SDs are not transparent and that taxpayers are often not consulted in their creation and have no idea of their existence. For example, customers often choose hotels based on room rates, but rarely by tax rate—in fact, many customers do not even know they are paying these additional sales taxes.

The number of SDs is growing rapidly, and the combined impact of these small districts is adding to the tax burden of Missourians across the state.

THE SOLUTION: Stricter requirements for the creation of SDs and stronger reporting requirements to ensure accountability.

Reforms that will provide greater taxpayer protection include (1) requiring that a minimum number of residential voters live in districts; (2) requiring that the State Auditor or Director of Revenue compile an annual report that details statewide SD spending, revenue, and debt; (3) requiring all SDs sunset unless explicitly approved by district voters, and (4) requiring more transparent public bodies, such as city or county councils or commissions, approve all SD bids. To truly curb abuse, the sales taxing authority of SDs could be revoked so that only property tax revenue could support district projects.

THE OPPORTUNITY: Reforming these districts could increase transparency and provide protection for taxpayers. It would also result in lower taxes in Missouri’s largest markets by making sure that special taxing districts only act with the informed consent of voters.

KEY POINTS:

  • In 2014 and 2015 alone, TDDs in Missouri collected more than $176 million in tax revenue—yet only 6% of those TDDs had residents within their boundaries. According to the State Auditor’s report, $125 million of that revenue was collected without residential voter approval.
  • Of the 34 TDD audits the State Auditor’s office has completed over the past 10 years, one-third concluded the TDDs under consideration were in bad financial shape. And nearly all audits indicated other issues, ranging from conflicts of interest and uncompetitive bidding practices to a failure to comply with basic accounting standards.
  • Requiring SDs to demonstrate they are meeting their job creation and tax revenue goals would keep them accountable to taxpayers.
  • SD board members voting for and approving contracts for themselves is a potential conflict of interest. Requiring that contracts be put out for bid would ensure a competitive process.

SHOW-ME INSTITUTE RESOURCES

Missouri State Auditor’s Report: Transportation Development Districts (Report No. 2017-20)

Blog Post: Auditor’s Report Sheds Light on Special Taxing Districts

Blog Post: Missouri’s Troubling Sales Tax Mosaic

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Sentencing Reform

Posted on by Patrick Tuohey

THE PROBLEM: Prison costs in Missouri are rising, and the state’s crime and incarceration rates are higher than the national average. According to the National Institute of Corrections, “The crime rate in Missouri [2015] is about 18% higher than the national average rate.” Missouri imprisoned 530 people per 100,000 population in 2015—the eighth-highest incarceration rate in the nation. High crime and incarceration rates present a significant cost to taxpayers, and imprisoning minors is especially expensive. Recent federal law requires that prisons adopt important—and expensive—protections for minors, among them providing educational resources and separating them from the adult population.

THE SOLUTION: Relax harsh and automatic sentencing laws that drive up costs without increasing public safety.

Courts should have the flexibility to sentence nonviolent offenders to treatment programs or probationary periods prior to locking them up—while still retaining the ability to treat violent or habitual offenders appropriately.

The Raise the Age movement advocates for 17-year-olds to be prosecuted in the juvenile court system unless certified as adults due to the nature or severity of their crimes. Raise the Age would mitigate much of the need to retrofit adult prisons to protect minors, and would offer minors educational and rehabilitative services.

WHO ELSE DOES IT? Currently, 45 states do not presume that 17-year olds should be tried as adults. Nine of these states have passed Raise the Age laws since 2007.

THE OPPORTUNITY: In addition to the cost savings from having to house fewer inmates or not having to retrofit adult institutions for minors, there is the potential for a substantial benefit in human capital if nonviolent and drug offenders are sentenced to treatment or probation instead of being warehoused in state institutions with few opportunities for self-improvement.

KEY POINTS

  • Passing Raise the Age would not prevent judges from prosecuting 17-year-olds as adults if they were repeat offenders or if their crimes were especially serious.
  • Other states have cut incarceration rates responsibly, reducing costs and increasing public safety.

SHOW-ME INSTITUTE RESOURCES

Blog Post: “Criminal Justice Reform: Addressing the Costs of Incarceration”

Blog Post: “Criminal Justice Reform: Raising the Age”

Blog Post: “Criminal Justice Reform: Mandatory Minimums”

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Special Taxing Districts

Posted on by Patrick Tuohey

Special taxing districts are political subdivisions formed to fund specific services and improvements such as fire protection and infrastructure. In practice, however, they often allow narrow special interests to tax the public for their own private gain while allowing little or no public input or oversight. Learn more about reforming special taxing districts: https://showmeinstitute.org/blog/subsidies/2018-blueprint-special-taxing-districts

Hair Braiders Suffer Setback in Court

Posted on by Philip Oehlerking

Bad policies affect real people. Here in Missouri, African-style hair braiders Ndioba Niang and Tameka Stigers are fighting nonsensical regulations that keep them from earning a living. Unfortunately, they were dealt a blow when the United States 8th Circuit Court of Appeals found that the Missouri licensing requirements are not discriminatory and do not violate their rights. You can read the judge’s decision here.

In the past, we have written and talked many times about the excessive regulations that require practitioners of African-style hair braiding to go to a cosmetology school and undergo 1,500 hours of expensive education—almost none of which is related to their distinctive techniques—to get a license. However, because the state has an interest in public health and safety, the court found “the fit between the licensing requirement and the State’s interest is imperfect, but not unconstitutionally so.” In other words, these generalized regulations apply to all hair-care professionals and are not aimed specifically at the hair braiders; therefore, the regulation is not discriminatory. The hair braiders argue that their trade is distinctive and should not be lumped in with barber or cosmetology regulations. However, the court determined that African-style hair braiding “rationally” falls squarely within the Missouri’s definition of cosmetology (RSMO 3.29.010). So where do we go from here?

This issue could be put to rest by commonsense licensing reform. Missouri could simply exempt hair braiding from licensing or impose more narrowly drawn qualifications. Past efforts at reform have failed. Is this a case where special interests are just protecting their turf? 

Ndioba, Tameka, and other African-style hair braiders want to practice a profession for which they’re qualified and offer a service to customers. Why doesn’t government get out of their way?

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